Water utilities are crucial for guaranteeing the human right to safe water and sanitation. The session “Government, pay your water bills!” on August 25th at the Week on Water for Development (WW4D) shed light on the issue of governmental non-payment of water and sewage bills. This issue can heavily starve utilities of much-needed resources to operate efficiently and become economically viable. Also it is of great importance as most utility managers, government representatives, and development partners are aware of the matter, but rarely discuss it openly. This session brought together utility managers, development partners and civil society organizations to openly discuss, in four different breakout groups, the topics of governmental non-payment, its impact, and the strategies to overcome it..
Research presented by Sara Ramos, member of Solutions for Water Integrity and Management (SWIM), demonstrated that 95% of the utilities investigated across 18 countries – mostly from the global south – reported cases of governmental non-payment. The reasons identified were diverse, ranging from political interference to the belief that government entities and public service providers should not have to pay for water and sanitation services.
Civil society campaign in Zambia
In Zambia, for example, services to government institutions comprised 50% of the utility’s anticipated operational revenue in the financial year of 2019/20; however, the bills were not paid. Bubala Muyovwe, from the NGO WASH Forum in Zambia, explained the diverse reasons for these developments, ranging from weakness in cooperate governance to failure to prepare financial statements. Furthermore, Muyovwe highlighted the impact of the COVID-19 pandemic on the financial stability of water utilities stating that revenues have declined even further while expenses have risen due to, for instance, the purchase of additional chemicals. Although the government has developed strategies to overcome governmental non-payment such as, the installation of prepaid water meters, the problem prevails. Muyovwe stated that the next steps of a civil society campaign in Zambia will be to raise awareness of the issue through the media, collaborate with various utilities, and to exert pressure on the Ministry of Finance.
Getting the government to pay its bills in Romania
In her opening statement, Sara Ramos highlighted that the issue of governmental non-payment is solvable and there are diverse approaches to tackle it in the long run. In his breakout session Teodor Popa from the Romanian Water Company (Brasov), presented a successful example outlining how Romania was able to solve the problem 10-20 years ago. In Romania, the root of the problem was, among others, the lack of regulations and the problem of legal enforcement of non-payment. Consequently, certain measures were identified and implemented to address non-payment. The most important of these measures discussed were (i) the establishment and legal strengthening of regulators who can enforce the payment of unpaid accounts, (ii) the simplification of the legal process to sue for arrears, and (iii) the establishment of accountability provisions for government institutions in which they need to show that the funds have been used to settle arrears. Furthermore, through structural change, water utilities gained more independence from political interference.
What regulators can do: experiences from Rwanda
In this breakout session, Jacques Nzitonda, Director of Water and Sanitation from Rwanda,highlighted different ways that regulators can provide incentives for government institutions to pay their bills. Advocating for government institutions to allocate annual line budgets, as well as, the inclusion of indicators on government debt in utility reporting, were identified as the most influential measures to transform the issue of non-payment. Additionally, he noted that utilities should be encouraged and authorized to disconnect government institutions in case of non-payment. In the case of Rwanda, it was possible to address the issue through the increase of queries by the auditor general if a government institution has arrears. Overall, the aforementioned methods to address non-payment also played an important role in the utilities ability to take on commercial financing loans.
Supporting civil society space and voice through international advocacy
The role of civil society was comprehensively discussed in this breakout session. Al-Hassan Adam from End Water Poverty explained how a civil society-led campaign can exert pressure on government institutions to pay their water bills. The key aspects of such campaign would be to put local partners upfront and assure its flexibility.. Al-Hassan further emphasized that civil society is not homogeneous and that its diverse organisations operate differently in the light of national politics.
The key insights of this session were that the problem is very real and the question should be how we address it. People are right-holders and governments are duty-bearers; it is, therefore, the government’s responsibility for human rights to water and sanitation, and non-payment undermines it. If the government does not pay, it is the individual who will have to compensate for the costs through higher tariffs or poorer service. However, examples from Romania or Rwanda showed that governmental non-payment is a solvable problem, but only if there is the willingness and the long-term vision to make this behavioral and cultural change.
For more information on the issue of governmental non-payment, we invite you to read our policy brief click here.